Consider the following: $$\begin{array} { l l }
&\text { CF Now }\
\text { Risk-free rate in the United States } & 0.04 / \text { Cear } \
\text { Risk-free rate in Australia } & 0.03 / \text { year } \
\text { Spot exchange rate } & 1.67 \mathrm {~A} \$ / \$
\end{array}$$ What should be the proper futures price for a 1-year contract?
A) 1.703 A$/$
B) 1.654 A$/$
C) 1.638 A$/$
D) 1.778 A$/$
E) 1.686 A$/$

Question

Consider the following: $$\begin{array} { l l } 
&\text { CF Now }\
\text { Risk-free rate in the United States } & 0.04 / \text { Cear } \
\text { Risk-free rate in Australia } & 0.03 / \text { year } \
\text { Spot exchange rate } & 1.67 \mathrm {~A} \$ / \$
\end{array}$$ What should be the proper futures price for a 1-year contract?
A) 1.703 A$/$
B) 1.654 A$/$
C) 1.638 A$/$
D) 1.778 A$/$
E) 1.686 A$/$

Quizplus · Accepted Answer

The Answer is B

Consider the Following What Should Be the Proper Futures Price for a 1-Year